Canada’s refusal to weaken supply management protections indicates that it is the most important Canadian issue at world trade talks, says the chief Canadian agricultural negotiator.
“The fact that we have maintained a very hard position on supply management I think is a pretty powerful signal that for Canada, that’s what matters most and therefore some accommodation should be found to respect that position,” Gilles Gauthier said Oct. 6 at the House of Commons international trade committee.
Yet he also told MPs that an Agriculture Canada analysis of the impact of past trade liberalization deals shows a significant advantage of more than $1 billion during the past 20 years annually for red meat exporters.
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The analysis is limited to increased sales into Asia-Pacific markets and its impact on domestic prices from increased exports. It would be far greater if extended to other export markets.
It argues that the trade increases would have been much larger if BSE had not closed Asian markets in 2003.
The analysis of the benefits of liberalizing trade deals for export-dependent sectors supports the argument by members of the Canadian Agri-Food Trade Alliance that proposals on the table at World Trade Organization talks now could open up $3 billion in annual new trade opportunities and should not be jeopardized by defence of supply management.
Gauthier said the 2008 departmental report on the impact of past trade deals on exports of red meat products to the Pacific Rim region is “striking” in its benefit to Canada.
“That study is probably one of the most comprehensive studies ever undertaken in the department to try to assess what is the impact of trade agreements,” he told MPs.
“Our estimate is that without the liberalization from the previous (WTO) round, we would have witnessed a reduction of at least $1 billion of our export of the red meat sectors in the Pacific area. So that’s a pretty significant export just for one sector, the red meat sector.”
The study was based on trading models that tried to assess the increased value of red meat trade into the Pacific Rim since trade-liberalizing deals began in 1988.
The most significant deal was the 1995 General Agreement on Tariffs and Trade deal that led to creation of the WTO.
While exporters often claim the 1995 GATT deal had limited benefits and was a lost opportunity, the Agriculture Canada study suggests otherwise.
“These results demonstrate that at least 43 percent of the strong growth in Canadian pork production since 1990 is due to the market liberalization that began in 1988,” said the study. “For beef, the results suggest that it is responsible for 28 percent of the strong growth in production prior to the BSE crisis.”
The study said that over the 20 years after 1988, increased trade to Pacific Rim countries including South Korea, Japan, Philippines and Australia boosted farm revenues by $21 billion compared to revenues that would have been received without greater access to foreign markets.
Without that access, livestock farm revenues would have contracted because of reduced prices and reduced production.
